Customer Development

Designing the customer you want September 21, 2013 | Boston, MA

We are getting ready to get out

and talk to people

take a look at your lean canvas

value creation how you create value – the problem you are solving

value capture the money

value delivery getting value into the hands of customers

where is your biggest gap?

customer development is

a pathway to address the gaps in your lean canvas

product development

is to [coding, machining,

formulating]

customer development

is to ???????

as  

product development

is to [coding, machining,

formulating]

customer development

is to [interviewing, surveying, pitching]

as  

product development

is to something

someone buys

customer development

is to ??????

as  

product development

is to something

someone buys

customer development

is to how someone

buys it

as  

the big picture

SDSTOPS  STOP Customer Validation

SDSTOPS  STOP Customer Creation

SDSTOPS  STOP Customer Discovery

SDSTOPS  STOP Company Building

Iteration Execution

Turn hypotheses into facts

Identify scalable and repeatable sales model

one level deeper

problem-solution fit

problem-solution fit

product-market fit

product-market fit

customer discovery

• State your hypotheses

• Test the “problem”

• Test the “product”

• Verify

hypotheses

Customer/Problem Hypotheses

•  Types of customers / archetypes •  Magnitude of the problem •  Visionaries •  A day in the life of a customer •  Organizational impact •  ROI justification •  Problem recognition •  Minimum feature set

Product Hypotheses

•  Features •  Benefits •  Product delivery schedule •  Intellectual property •  Total cost of ownership •  Dependency analysis

hypotheses

Distribution/Pricing Hypotheses

•  Distribution model •  Distribution diagram •  Sales cycle / ramp •  Channel strategy •  Pricing (ASP, LTV) •  Customer organization map •  Demand creation

Demand Creation Hypotheses

•  How do competitors create demand? •  How will you? •  Dave McClure’s AAARR model •  Who are influencers / recommenders? •  Key trade shows? •  Key trends? •  Start assembling advisory board

hypotheses

Type of Market Hypotheses

•  Positioning and Differentiation •  Existing market: the product is the basis of competition •  New market: creating the market is the basis of competition •  Redefine existing market: resegmenting the existing market is the

basis of competition

Competition Hypotheses

•  Who is out there? •  Why are they important? •  How do customers use them today? •  What don’t customers like about them?

Exercise 1: State your hypotheses Customer / Problem Product Distribution / Pricing

Demand Creation Type of Market Competition / Alternatives

• State your hypotheses

• Test the “problem”

• Test the “product”

• Verify

Get out of the

building!

But... who ya gonna call?

customer segments

why segment?

http://www.youtube.com/embed/LQqq3e03EBQ

price

flexibility

customer experience

service

a segment is

• an identifiable group of people

• who buy

• a common good or service

•  for a common reason

describing your customers

•  Markets you serve

•  Geographic regions

•  Business or consumer

•  Demographic

•  Life stage

•  Economic dynamics

•  Size of segment

•  Titles and associations 34

Who they are + how to find them

Where they gather + can easily qualify

Don’t know where they gather + can easily qualify

Don’t know where they gather + deep qualification

There is no way to qualify them

A B C D F

how identifiable is your customer?

Exercise 2: Your segment Persona Where they gather

How you qualify Why they care (problem hypothesis)

Tools for talking to customers

38  

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html

People don’t buy what you do. They buy why you do it.

Simon Sinek How Great Leaders Inspire Action

39  

Milkshake marketing: what is the job the customer is hiring our product to do?

http://www.youtube.com/embed/VmbSpTJXozk

Clayton Christensen Market Disruptions & Online Learning

customer empathy map

your test plan

•  What part of the lean canvas do you want to test?

•  Who will you test with?

•  How will you reach them?

•  What is the test?

•  How will you measure?